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Effectiveness of Strategic Plan

Write a 2 page paper addressing the following elements in your paper:

• Examine how an organization assesses the effectiveness of its current strategic plan.
• Be sure to include both qualitative and quantitative measures.

Include a title page and 3-5 references.  Only one reference may be from the internet (not Wikipedia). The other references must be from the Grantham University online library. Please adhere to the Publication Manual of the American Psychological Association (APA), (6th ed. 2nd printing) when writing and submitting assignments and papers.

Strategic Alternatives

Strategy, as we have seen so far, is a culmination of achieving goals in an ethical manner. We have covered the different levels of strategy from corporate based to organizational unit. In this lecture, we will review the different types of strategy and how and when to use them.

The first type of strategy that we will review is that of directional strategy. This particular strategy is the most basic in operating requirements. Direction is set by overarching mission and vision statements. One thing to keep in mind is that it is often necessary to step back and view the organization from a 50 foot view. Often, managers are so caught up in the day to day operations that it is difficult to understand if the organization is still adhering to the large scale strategic plan.

The next type is that of adaptive strategy. Once the overall direction has been determined, the organization can set its sights on whether to expand, decrease, or maintain its current operations. In this type of strategy we would also find the organizational desire to enter into new areas or change the current offerings. As mentioned earlier, many organizations choose to specialize in niche markets. One must be careful about moving into a niche as once the commitment is made to specialize, the organization limits its ability to quickly move into other areas should regulations or other forces necessitate a change.

Market entry strategies, the third strategy alternative, are developed once the organization decides to either expand or alter the product offering. As you learned in a previous week, it is absolutely imperative to have a firm understanding of competition. It would be very hard to enter a niche market if your competition controls the patents or other valuable resources.

The fourth strategy is that of competitive alignment. Once an organization determines that it would like to change market focus, the competitive approach would come into effect. These strategies would include whether to market locally, nationally, or both. Other areas of focus would be revenue stream, supply and demand, and length of time before competition would equal or surpass your offerings. In the Civil War, a Confederate General by the name of N.B. Forrest was asked why he was experiencing such overwhelming success. He replied by stating that he was “the furstest with the mostest.” Being the first one into a new market certainly has its advantages. However, competition will undoubtingly follow.

The last strategy to discuss is that of implementation strategies. As you have surmised, each strategy builds on the previous. This final strategy is action related. Organizations often get so worried about planning and making sure that each contingency is addressed that they miss their window of opportunity. In summary, many experts would argue that the wrong action is better than no action. If an organization chooses the wrong path, it at least gains valuable understanding of other options. Without action, organizations move nowhere and are quickly overrun.

W6 Lecture 2 “Assessing the Current Strategy”

Healthcare Strategic Management

Assessing the Current Strategy

In lecture 1 of this week, we concluded by suggesting that the wrong action is better than no action. While this may be true, this statement raises several questions. The first is, how do we know that we went down the wrong path? And the second question is what do we do once we have come to this realization?

A mistake that new managers make is refusing to admit that they were wrong. How many of us have been involved with a plan that we know was failing yet the organization continues to support the train wreck? An inexperienced manager starts to point fingers and the blame game quickly ensues. Unfortunately, in such circumstances, organizations often lose their most talented employees due to a lack of trust. It has been said that people do not quit organizations, people quit people. One can only wonder if Ford lost talent when it chose to not modify and make their cars safer.

The organization must be able to step back and ask itself how well is the current strategy working? First and foremost, this would require that the employees were aware of the strategy in the first place! Although this sounds like common sense, several recent surveys indicate that less than half of all employees know what their mission statement entails. If an employee does not know the mission of the organization, odds are probably against them knowing the overarching corporate strategy. The question of how well the organization is performing with its current strategy requires both a qualitative as well as a quantitative analysis.

In a qualitative analysis, the organization surmises such indicators of health as employee morale, degree to which employees have embraced the plan, and both customer satisfaction and customer loyalty. In the long run, customer loyalty proves more valuable than customer satisfaction. As a patient, if you are satisfied with the care you receive from a physician, you will more than likely continue to see him or her. However, if a clinic opens up that is more convenient (closer, better hours, etc), although being satisfied with your original provider, you may switch doctors. If you were a loyal patient, regardless of convenience, you would not consider switching. Many organizations have realized the value of loyalty over satisfaction and are currently working towards building customers for life.

Although a qualitative analysis provides great indicators as to whether or not we are following the correct strategy, nothing surpasses the hard facts. While financial results are not measured overnight, an organization must establish measuring points to determine cost-value relationships. Most organizations review such information monthly; however with more effective patient managing, financial status can be measured in real time. Unless you are Amazon.com, odds are you would like to experience financial growth in as short as time as possible. Amazon.com’s original business plan surmised that it would not be profitable for 4 to 5 years!

Another quantitative component that has qualitative tendencies is indeed customer satisfaction. Many companies, including those from the health industry, are turning to the Net Promoter Score. Developed by Fred Reichheld in 2003, the NPS is growing in use. Let’s review a quick example to determine what the NPS entails and how the score is derived. Imagine that you had chronic low back pain and wanted at all costs to avoid any open surgeries. Through your primary care physician, you are referred to a local pain clinic specializing in non-intrusive pain control techniques.

Before you walk into the clinic’s door for treatment, you have a certain expectation of what the visit will entail. For this example’s sake, let’s quantify the expectation and believe that your pain will be reduced by 50% and as a result you walk in assuming that your visit will be mediocre or a 6 out of 10. However, after receiving treatment, you find that your pain has been reduced by 80%! You now rate the clinic 9 out of 10. At this point, you are so excited about your outcomes that you want to tell someone. Perhaps you know someone with similar pain conditions and you actively refer them to the clinic. Or, better yet, you post on social media just how great your experience was. You are now an active “promoter” of this pain clinic. This is truly more powerful than the best advertising.

Conversely, let’s now assume that you went into the clinic and found that your pain was not reduced, or in the worst case scenario, actually increased. Despite spending time and money, there was no noticeable improvement or even a worsening of condition. As a result, you now rate your visit a 2 out of 10 or even a 1 out of 10. You now actively post on social media just how disappointed you were and you recommend for your friends and acquaintances to avoid this clinic. Twenty years ago, if you were disappointed, as in the case above, the rule of thumb was that you would tell seven people about your poor experience. Thanks to Facebook, Twitter, and other social media, you now tell 700! Today’s organizations have employees actually assigned to monitor social media in an effort to counter such posts before they can cause too much damage to reputation.

The NPS is derived on the percentage of individuals who would actively fall into the “promoter” category as noted above. Although normally derived from a Likert scale of 1 to 10, it is up to the organization to determine at which point on the scale is an individual a “promoter” and at what point are they a “detractor.” Many organizations assume that customers who give a score of 8 or above are in fact promoters, whereas those who score their satisfaction a 5 or below would be a detractor. Individuals who score a 6 or a 7 in this scoring example would be neutrally based and would not alter the NPS score. Therefore, the score could be anywhere from -100 where all customers are detractors up to a +100 where all customers are promoters. Organizations at or above 40% on the NPS are considered to be doing very well.

In conclusion, an organization must clearly define its strategy and ensure that all employees are fully aware of such. This will increase overall employee morale as most employees want to be involved in something greater than themselves. Organizations must also pre-determine measuring points to assess both qualitative and quantitative factors. When organizations move their measuring points to fit the strategy, the likelihood of success greatly diminishes.

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